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Federal district court decides the BPCIA “patent dance” is optional, but Federal Circuit soon to weigh in

Under the Biologics Price Competition and Innovation Act (“BPCIA”), the Food and Drug Administration (FDA) provided a pathway for approval of abbreviated applications for biological products (“BLAs”) that are shown to be “biosimilar” to an already-approved biologic (“reference product”). A biosimilar drug is essentially a copy of a biologic medical product, which is any medicinal product manufactured in, or extracted from biological sources.

Under the BPCIA, once a biosimilar application is submitted to the FDA, there is a procedure, commonly referred to as the “patent dance,” for resolving patent disputes. The patent dance procedure has strict timing requirements and involves several rounds of detailed information exchanges between the reference product sponsor (usually the innovator company) and the biosimilar applicant. For example, the patent dance requires a prompt exchange of information and materials between the parties describing infringement and invalidity positions. In addition, the BPCIA requires a biosimilar applicant to give the sponsor at least 180 days’ advance notice prior to the first commercial marketing of its biosimilar.

There has been some uncertainty in the pharmaceutical industry as to how the patent dance procedures and the 180-day notice provision would be enforced by United States district courts. Recently, a District Court for the Northern District of California issued an important ruling about both of those issues in Amgen, Inc. v. Sandoz, Inc., 14-cv- 4741 (March 19, 2015). In that case, Amgen had alleged that Sandoz, which filed the first U.S. abbreviated biosimilar application in 2014 for a biosimilar of an Amgen cancer treatment product called Neupogen, failed to “follow the rules” set forth by the BPCIA by refusing to engage in the patent dance. Amgen also argued that under the BPCIA, biosimilar applicants cannot provide the 180-day required notice until after FDA approves the product. Sandoz argued that the patent dance was optional under the law, and also contended that the 180 days notice requirement would be fulfilled as long as the BLA applicant provided sufficient notice before marketing its biosimilar.

On March 19, 2015, Judge Richard Seeborg of the Northern District of California rejected Amgen’s argument, and ruled that participation in the patent dance is, indeed, optional. The Court determined that while the BPCIA does set forth an elaborate procedure for exchanging information (i.e., the patent dance), parties may nonetheless opt out of these procedures and proceed directly to patent litigation. The Court indicated that the use of the word “shall” in the BPCIA did not require the parties to participate in the patent dance, but instead indicated what the parties must do if they choose to dance.

Judge Seeborg also found Amgen’s argument about the 180-day notice period “problematic” because it “would tack an unconditional extra six months of market exclusivity onto the twelve years reference product sponsors already enjoy” under the law. Accordingly, the Court rejected Amgen’s argument, and confirmed that under the BPCIA, it was sufficient for Sandoz to provide Amgen with its 180 days’ notice in advance of receiving FDA approval.

The parties in Amgen v. Sandoz have taken their case to the Federal Circuit on an expedited appeal schedule; the Federal Circuit should settle the issue of whether the patent dance is optional by this summer or early fall at the latest.

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